NVIDIA To Reduce Orders Of TSMC 5nm Wafers With Crypto Gravy Train Derailed, AMD May Benefit
Reportedly, NVIDIA (here for more about the company) is looking to reduce orders for 5nm wafers from TSMC. This is because it predicts a significant drop in demand from both players and miners for cryptocurrencies. Miners are flooding the market with used GeForce RTX 30 series graphics cards, which gamers are only too happy to buy, impacting NVIDIA’s sales in both market segments. Prior to the cryptocurrency crash in Q1 2022, NVIDIA had expected good sales of its cryptocurrency GPU GeForce next generation. Looking ahead, it had placed orders for a large allocation of 5nm wafers from TSMC. The company has returned to TSMC from Samsung, which it manufactures RTX 30 series 8nm GPU.
New details on TSMC 5nm wafer order reduction
With NVIDIA changing its mind about 5nm orders, it’s at the mercy of TSMC, who made those allocations (and now faces a loss). It is up to NVIDIA to find a replacement customer for the 5nm volumes it wants to withdraw from. Chiakokhua (aka Retired Engineer), interpreted a DigiTimes article originally written in Chinese, which claims that NVIDIA has made prepayments to TSMC for its 5nm allocation and now wants to withdraw from some of them. TSMC is unwilling to move but could at most suspend shipments by a quarter until the first quarter of 2023. Allowing NVIDIA to persuade the market to digest 8nm GPU inventory. NVIDIA is responsible for finding replacement customers for the canceled allocation.
The same article paints a different picture for AMD. The company reduced orders for the 7nm and 6nm nodes. But his 5nm orders are not affected. AMD does not produce its next generation RDNA3 GPUs on 5nm, but also its next generation “Zen 4” CPU chiplets. Any drop in GPU silicon demand would be internally adjusted by increasing orders for chiplet “Zen 4”. AMD’s growth as a processor manufacturer is no longer hampered by technology leadership, but by volume. The company could jump to the prospect of an allocation of 5 nm higher. This is because it would increase production of the “Zen 4” processors to meet the growing demand for high margin server processors with its upcoming “Genova” and “Bergamo” EPYC processors.
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NVIDIA article may reduce TSMC 5nm wafer orders comes from allotek.